Fashion and Luxury

Consulting for Procurement and Supply Chains

Fashion and luxury brands navigate rapidly evolving markets. They must strike a balance between their creative innovation and operational efficiency. Through customized procurement solutions and data-driven strategies, KGM Strategy helps optimize supply chains without compromising each brand’s distinct character.

 

Creating Value for Fashion & Luxury Brands

Strategic Sourcing

 

We assist fashion and luxury brands in overcoming supply chain challenges by crafting sophisticated sourcing strategies. These strategies enhance supplier portfolios, optimize geographical distribution, and manage raw material procurement, ensuring cost-effectiveness, supply chain stability, and continuous access to critical materials.

 

Cost Optimization

 

We assist fashion and luxury brands in enhancing their cost efficiency by evaluating their indirect expenditures, implementing co-sourcing strategies, and enforcing spend control practices. This leads to immediate savings, better supplier management, and sustainable profitability, even during times of economic uncertainty.

 

Enhancing Operating Models

 

We optimize procurement operating models and encourage collaboration across departments to reduce time-to-market. This improves communication, efficiency, and integration while refining governance and sourcing frameworks, ensuring that brands remain competitive in dynamic markets.

 

 

 

 

Challenges in the Fashion and Luxury Industry

The fashion and luxury sector is currently navigating various challenges, including supply chain interruptions, cost increases, and slow go-to-market timelines.

Escalating geopolitical tensions

Ongoing geopolitical unrest has resulted in supply chain disruptions, limiting access to key raw materials like textiles and precious metals. As a result, brands are forced to reconsider their sourcing strategies and navigate uncertainties in global trade routes.

Fluctuating market conditions

Sudden changes in currency exchange rates, raw material prices, and inflationary pressures are eroding profit margins. Brands are finding it increasingly challenging to maintain control over pricing while ensuring consistent product quality.

Shifting consumer demands

As consumers increasingly prioritize sustainability, transparency, and personalization, fashion and luxury brands must quickly adjust. The pressure to meet these evolving expectations is straining financial models and operational flexibility.

Fragmented organizational structures

Disconnected internal departments can delay key decision-making, hindering product development cycles. Without a more integrated approach, brands risk losing their competitive advantage as more agile competitors seize emerging market opportunities.

How we support fashion and luxury brands?

Drawing on deep industry expertise, our fashion and luxury consulting team understands the unique challenges you face. By working closely with your team, we develop tailored procurement and supply chain strategies that align with your specific needs. Through a collaborative and hands-on approach, we focus on enhancing resilience, optimizing costs, and accelerate your time-to-market.  

Our comprehensive services – from strategy to implementation – are designed to optimize every aspect of your operations, ensuring your brand thrives in a fast-paced environment.

Strategic sourcing

Supply chain disruptions, driven by geopolitical tensions and market instability, have made accessing some essential materials increasingly difficult. We help fashion and luxury brands navigating these challenges by developing robust sourcing strategies that include supplier portfolio management, geographic footprint optimization and raw material management, while also exploring opportunities like nearshoring to strengthen supply chains.

Our approach ensures complete cost transparency and resilience, enabling brands to navigate disruptions effectively. With strategic supplier partnerships, we help brands maintain a steady supply of critical materials while optimizing costs at the component level, ensuring they can meet customer demands swiftly and efficiently.

Icon - Case study: Driving €25 M savings through strategic negotiation

A leading British luxury fashion brand aimed to optimize its costs of goods sold (COGS) without impacting the quality of its products and turned to us to enhance their negotiation efficiency. Working closely with their teams, we secured over €25 million in savings by upskilling their teams’ negotiation capabilities and defining supplier-level strategies.

In addition, we also implemented a procurement performance process with clear KPIs, aligning the fashion house’s sourcing strategies with their long-term goals, and ensuring sustained impact and operational resilience.

Cost Optimization

In markets where there are severe cost pressures due to economic volatility and fluctuating demand, we help fashion and luxury brands reduce their direct and indirect spend to deliver fast P&L impact. Our approach includes comprehensive opportunity assessments, co-sourcing initiatives and the implementation of a spend control tower to better manage and monitor expenditure.

We engage in joint negotiations with our clients – leveraging advanced tools and benchmarks – to drive immediate cost reductions and improve supplier management. By optimizing procurement processes, we enable brands to work more efficiently and effectively to ensure profitability, even under financial strain.

Icon - Case Study: Unlocking €12.5 M savings through strategic procurement

For a globally renowned Italian luxury brand, we scaled up procurement efforts to deliver immediate value on their indirect spend. Through the execution of 12 high-impact initiatives, we unlocked €12.5 million in savings.

We supported key categories such as logistics and packaging, marketing and facility services. That was done by conducting tenders, leading supplier negotiations and implementing re-specification and demand management strategies. By optimizing these categories, we improved cost efficiency and supplier relationships. These actions enabled the brand to strengthen its competitive edge and sustain long-term operational efficiency in what was a volatile market.

Operating Model Enhancement

Slow go-to-market times often arise due to siloed processes and complex organizational structures. To address these challenges, we focus on optimizing the procurement operating model and ensuring its seamless integration with other departments.

This approach enhances communication, coordination and efficiency across the entire organization. By conducting maturity assessments, benchmarking performance and redesigning operating models, we foster seamless cross-departmental collaboration. Additionally, we refine governance frameworks – and optimize both internal and external sourcing structures – to accelerate the design-to-shelf process.

This ensures brands stay ahead of trends and remain competitive in fast-moving markets.

Icon - Case Study: Optimizing the procurement operating model for faster go-to-market

We partnered with a prestigious Italian leather goods brand to streamline their procurement operating model and improve cross-departmental collaboration, which reduced inefficiencies that were slowing their go-to-market timelines. By conducting a thorough maturity analysis across 21 global entities and €200 million in spend, we identified key bottlenecks in their internal processes.

Through improved interfaces between procurement, production and design teams, we fostered seamless collaboration. This redesign of the procurement framework led to faster coordination across departments, accelerating the design-to-shelf process, and ensured the brand remained competitive in its fast-moving market.

 

 

 

 

Discover our latest insights and tools

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